Vanguard filed a registration statement to offer a new exchange-traded fund that tracks the same index as one of Barclays’ iShares funds, the MSCI EAFE (Europe, Australasia, Far East) Index, MarketWatch reports. But Vanguard’s fund will only change 15 basis points, as opposed to the 35 basis point fee on the iShares fund.
International ETFs dominate net new flows to the category. Of the $20 billion that has flowed to ETFs so far this year, $13 billion has gone to international ETFs. And of the money that has gone to international ETFs, the iShares MSCI EAFE exchange-traded fund has captured 35% of the flows.
“This may be the story of the year so far in the ETF business,” said Jim Wiandt, editor of the Journal of Indexes. “It’s clearly a frontal assault aimed at the core of Barclays’ Global Investors’ revenue stream.”